The bacterial virus lambda is widely used as a paradigm for gene regulation and is a premier system for developing theoretical modeling methodologies, which are becoming increasingly important for addressing complex genetic networks involved in signal transduction, apoptosis, cancer development, and other systems. Our laboratory uses E. coli and lambda as a model system for studying developmental circuits, the genes that regulate lambda circuitry, and host/phage interactions. Viruses of prokaryotes as well as eukaryotes use host functions to fulfill their developmental lifecycle and respond to the environmental conditions of the infected cell. We believe that the virus targets critical functions of the host for viral development and those functions are part of the basic sensory system of the host for reacting to the environment. The things we learn about host interactions with lambda is relevant for studies of eukaryotic viruses. Essentially, the viruses tell us what is most important in the host and how to study it. The temperate bacteriophage lambda is a great tool for such studies; it can develop as a lytic virus able to rapidly reproduce while destroying its host, or it can develop as a lysogen existing as a dormant provirus within the host genome. How it decides these fates has been an object of study for years, and these studies continue to reveal fascinating new discoveries about this simple system, a system that is widely used as a model for understanding and describing genetic circuitry networks for all organisms. Such model studies depend upon accurate and detailed information about its components, and lambda is a great system to build on because of its rich scientific history. Our lambda studies are multifaceted. We are attempting to describe the lysis/lysogeny decision following lambda infection by using direct readouts for the lytic and the lysogenic pathways. This readout takes the form of continuous intracellular GFP measurements following infection, which measure Q function for lytic output and CII function for lysogenic development. The number of phage infecting a cell affects the decision, as do the growth conditions. Other gene functions like CIII, CI, and Cro have effects on the activities of the Q and CII functions. We have designed a reporter system for the lambda pL and pR early promoters within the bacterial chromosome. This reporter allows us to examine the effects CI repressor and the left oL and right oR operators on repression and induction in the prophage state. Our studies have verified genetically an interaction of the two operator regions, which occurs by a cooperative binding of the repressor tetramers at each operator to form an octamer. This repressor octamerization and joining of oL with oR increases repression in the prophage state and prevents Cro action at the operators until repressor activity is eliminated by induction. This is a result that contradicts the Genetic Switch of Ptashne. N is a critical regulatory protein for the lytic pathway. The lambda N antiterminator is the paradigm used to understand the Tat transcription antiterminator protein of HIV. Classically, N is known to act as a positive regulator of transcription; we recently found that N is also a negative regulator of its own translation. As a positive regulator, N modifies the transcription elongation complexes that initiate at the pL and pR promoters by converting RNA polymerase (RNAPol) to a form that is resistant to transcription termination. N with several host proteins called Nus bind RNA sites, NUT, using the RNA as a tether to interact with the elongating RNAPol to form the antitermination complex. As a negative regulator, the N antitermination complex represses N translation. The E. coli dsRNA endoribonuclease, RNaseIII, which is the bacterial homolog of the eukaryotic dicer protein involved in RNAi, regulates Ns repression of its own translation. Cellular levels of the global regulator RNaseIII are controlled by growth rate, and the level of RNaseIII coordinates the level of N. Since N antiterminator is required for other phage genes transcription, this control on N levels also affects the lytic/lysogenic development as we describe. The ability to modify the chromosome and carry out 'gene therapy' in bacteria has progressed rapidly in the last few years. Our studies with the lambda Red recombination functions have been critical for this advance. Gene therapy in mammalian cells using recombination based on the Red functions is a real possibility. Mammalian viruses, like HSV, use the same Red-like recombination functions as phage lambda. The lambda Red proteins include Exo, Beta, and Gam. We have discovered that Red function in the bacterial cell can be used for a new form of homologous recombination-dependent genetic engineering, called recombineering. Recombineering is possible because the Red functions can be used to direct in vitro-generated linear DNAs to targets in the cell based on homology. What makes the system practical for engineering is that short homologies of 50 bp are sufficient for targeting, and the recombination frequency is very high. In addition, the targeting is precise to the base and does not require any restriction sites. Linear double-strand (dsDNA) can be generated by PCR or just by annealing two synthetic oligonucleotides, and requires Exo, Beta, and Gam function for generation of recombinants. Gam inactivates host nucleases to protect the transformed DNA. Exo and Beta carry out the homologous recombination. Exo binds the dsDNA and degrades the 5' end generating 3' overhangs. Beta, a single-strand DNA (ssDNA) binding protein, binds the overhangs and anneals them to complementary ssDNA. In addition to dsDNA, short synthetic ssDNA oligonucleotides can also be directly recombined with the target in the cell. This recombination requires only the Beta protein and not Exo or Gam. It is also independent of RecA and under appropriate conditions generates recombinant bacteria at an efficiency of 25%, making screening for recombinants straightforward. We are studying the system both to optimize the aspect of genetic engineering and to understand how Red recombination of linear DNA occurs in the cell. Recombineering has become vital to all types of eukaryotic genetic studies using genomic clones on F plasmid-derived bacterial artificial chromosomes (BACs). Modified clones are generated in E. coli and reintroduced into their native genomic background for study